From Airbnb to Uber, some of Silicon Valley’s most successful companies have been fighting regulators since their inception. Now, one of the tech industry’s most respected venture capital firms wants to help both sides of the battle make nice with each other.
Andreessen Horowitz announced today that it’s launching a new policy and regulatory affairs unit, and that it has appointed Ted Ullyot, Facebook’s former general counsel, to lead the shop. Ullyot, who worked at both the White House and the Department of Justice before coming to the Valley, will be tasked with helping the firm’s portfolio companies see eye to eye with the government regulators with whom they’re increasingly butting heads.
In general, Silicon Valley has not done a very good job of being proactive and having open lines of communication. Margit Wennmachers, Andreessen Horowitz
This move is a strong sign that the Berlin Wall that’s risen between Silicon Valley and government is beginning to crack as tech companies realize they can accomplish more by working with the the powers that be instead of against it. Meanwhile, the federal government at least is gradually becoming more receptive to tech and has started recruiting top tech talent like former Googler and current US CTO Megan Smith into its ranks.
“In general, Silicon Valley has not done a very good job of being proactive and having open lines of communication,” says Margit Wennmachers, a partner at Andreessen Horowitz. “Now, I think both sides have gotten a lot better.”
Move Fast and Fix Things
That’s partly because they need to. Tech companies today are growing faster than ever before, thanks to the proliferation of mobile technology. This means they’re also attracting the attention of government much earlier than they did even a decade ago. At the same time, they’re taking on entrenched industries like transportation, payments, and hospitality, which are not only regulated by government, but are dominated by incumbents that have substantial sway over the government, from taxi industry lobbyists to big Wall Street donors. And often, it’s not the feds tech companies end up tangling with, but local and state regulators.
The goal of the new unit, Ullyot says, is to make sure Andreessen Horowitz’s portfolio companies don’t have to start from scratch every time they run into a regulatory “surprise.” That, he says, was a big part of his job in the early days of Facebook, navigating the muddy waters of privacy regulation during the early days of social media. “From a lawyer’s perspective, it was a fascinating project,” he says. “I thought: is there a way you can do this on a broader scale and help a lot of companies and help the tech sector in general?”
As head of this new unit, he will be doing just that. It would be reasonable to assume there would also be a substantial amount of lobbying involved in this role, but Ullyot insists that’s not the case. Instead, he says his job will be to convene a network of regulators, think tanks, and “influencers” to make sure the firm’s companies are having the right conversations with the right people before an issue arises.
“We’ll be working with them to think about the issues, and hopefully avoid those surprise issues in the first place,” he says.
Still, when an issue does arise, as it often does with Andreessen Horowitz investments like Lyft and Airbnb, it’s not a huge leap to imagine that the firm would be tempted to throw its weight around to make more pointed requests, just like lobbyists would.
For now, at least, both Ullyot and Wennmachers say that’s not the plan, and that the firm intends to leave those duties to the companies, themselves, many of whom already have substantial public policy teams.
“We’re going to teach them how to fish rather than throwing the line ourselves,” says Wennmachers. “That’s how the company becomes a great company.”